SpaceX's expected initial public offering has drawn a new warning after former OpenAI staffers and several artificial intelligence (AI) safety nonprofits urged potential backers to weigh risks tied to Elon Musk's AI venture, xAI.



The letter, addressed to investors, said the market may not be fully accounting for xAI's downsides and asked for additional detail ahead of SpaceX's prospectus. The authors also pointed to SpaceX's reported goal of raising as much as $75 billion and said the combined structure raises questions that investors should press on.



&#34;Investors evaluating SpaceX's AI exposure need more information to reasonably price it, accounting for both the upside and the downside. The path forward remains unclear: will SpaceX continue competing at the frontier of AI development, and if so, will it adopt the safety and security practices upon which its peers are converging?&#34; the letter questioned.



Benzinga reached out to SpaceX for comment but did not receive a response by publication time.



<div>




Read Also:

Elon Musk's xAI Doubles Down On Unpermitted Turbines During Pollution Fight




</div>


One of the organizations behind the letter is Guidelight AI Standards, a newly formed nonprofit co-founded by Steven Adler, a former OpenAI safety researcher and Page Hedley, a former OpenAI policy adviser. Adler resigned from his position in 2024, while Hedley resigned in 2019. Other signers included Legal Advocates for Safe Science and Technology, Encode AI, and The Midas Project.



The letter asks SpaceX to spell out whether xAI plans to keep building leading-edge AI models and, if so, to publish a public safety and governance plan.



&#34;As high-profile as xAI's safety incidents to date have been, the categories of risk on the horizon are of a different kind. Frontier AI capabilities are advancing rapidly, and the consequences of inadequate safety practices scale with them,&#34; the letter stated.



The authors cited incidents involving xAI's chatbot Grok, including responses that raised &#34;white genocide&#34; without prompting. They also pointed to a case in which Grok produced large volumes of sexualized images of women and children that spread on X, prompting 37 state attorneys general to demand steps to protect users.



Hedley told Wired in an interview that the volume of safety incidents xAI has had coupled with the regulatory attention they have received is &#34;far out of proportion to its market share.&#34; 



Adler added, &#34;It takes serious investment to rein in [AI safety] risks, and it seems that xAI has historically under-invested here.&#34;



The letter also noted that xAI has made some safety-related moves, including expanding an agreement with the White House to allow testing before models are released more broadly. Still, the authors wrote that investors need more information to judge the AI-safety exposure tied to SpaceX, adding, &#34;xAI's historical record has been serious enough to warrant scrutiny; it has not, by itself, foreclosed a better future for the company.&#34;



The letter also noted SpaceX's agreement to sell a sizable share of its GPU capacity to Anthropic, saying the arrangement muddies whether xAI remains a top-tier competitor within a broader corporate setup. 



&#34;Whether SpaceXAI will continue as a frontier AI developer inside a larger holding company, or wind down its frontier model business in favor of selling computing infrastructure to its competitors, has not been publicly disclosed. If SpaceX does intend to remain a frontier AI company, whether it will continue xAI's approach to safety or instead invest in the practices its competitors have adopted is also undisclosed.&#34;



Guidelight said it wants to develop uniform benchmarks for AI labs and deliver evaluations that are easier for non-experts to use, including policymakers, investors, and journalists. The xAI letter is the group's first public step, and the cofounders said their time at OpenAI shaped the effort.



Photo: Shutterstock



<div>



Read Also:

Federal Judge Calls US Crackdown On Anthropic 'Spectacular Overreach



</div>

SpaceX is accelerating its Nasdaq listing process, with an expected debut as early as June 12th. The IPO is projected to raise over $80 billion, aiming to be the largest in global capital market history. To pave the way for the listing, SpaceX will implement a 5-for-1 stock split to lower the barrier to entry for investors, and Elon Musk has explicitly pledged not to reduce his holdings. The funds raised will primarily be used for the Starship project and the construction of a low-Earth orbit data center. Financial details of the xAI business, recently incorporated into SpaceX, will also be disclosed for the first time in the prospectus. Wall Street generally believes that the current US stock market has sufficient liquidity to absorb this "super asset" that combines AI and cutting-edge technology. What are your thoughts? Let's discuss!

SpaceX is accelerating its Nasdaq listing process, with an expected debut as early as June 12th. The IPO is projected to raise over $80 billion, aiming to be the largest in global capital market history. To pave the way for the listing, SpaceX will implement a 5-for-1 stock split to lower the barrier to entry for investors, and Elon Musk has explicitly pledged not to reduce his holdings. The funds raised will primarily be used for the Starship project and the construction of a low-Earth orbit data center. Financial details of the xAI business, recently incorporated into SpaceX, will also be disclosed for the first time in the prospectus. Wall Street generally believes that the current US stock market has sufficient liquidity to absorb this "super asset" that combines AI and cutting-edge technology. What are your thoughts? Let's discuss!

SpaceX's target launch date: June 12th

TSLA

SpaceX

The AI Safety Coalition has warned SpaceX investors to consider risks associated with Elon Musk's AI venture, xAI, ahead of its IPO. A letter from former OpenAI staff and AI safety nonprofits highlighted that the market may not fully account for xAI's downsides and requested more information on its safety practices. With SpaceX aiming to raise up to $75 billion, the coalition emphasized the need for clarity on xAI's future and safety governance, citing past incidents involving its chatbot Grok.

- Former OpenAI staffers and AI safety nonprofits warned investors about the risks linked to Elon Musk's AI venture, xAI, ahead of SpaceX's IPO.  
- The letter emphasizes the necessity for clarity on xAI's safety practices and competition in the rapidly advancing AI field while questioning SpaceX's goal of raising $75 billion.  
- Concerns were raised about xAI's historical safety incidents, and the authors urged SpaceX to disclose its future direction regarding AI development and safety measures.

AI Safety Coalition Urges SpaceX Investors To Weigh xAI Risks Ahead Of IPO